While keeping your employees happy at work is important for morale, it is
staff commitment, and not staff satisfaction, that will help to maximise the
bottom line performance of your organisation
Once again, the effects of an economic downturn are looming
over many organisations.
For HR, this means a productive workforce is more crucial than ever, and, at
the same time, dealing with employees who can only look to the future with some
So what can employers do to get the balance right? To start with, they
should forget about keeping employees ‘satisfied’.
Employee satisfaction is, of course, a ‘good thing’, but does it have
anything to do with performance?
There is now clear evidence that ‘satisfied’ employees are not necessarily
employees who perform to the best of their abilities.
Satisfaction can be perceived as rather passive – an internal, personal
emotion that does not relate in any clear way to an organisational outcome. So
where is the benefit to organisations in employee satisfaction surveys?
Organisations have to start thinking much more clearly about what kinds of
staff attitudes actually make a difference, because ‘satisfaction’ is a red
Pioneering employers are coming to understand the need to rethink what they
measure; a requirement for an organisational dimension to attitude surveys in
addition to the usual employee-centred measures. As a result, commitment, which
is sometimes translated as engagement, is increasingly becoming the focus of HR
At the Institute for Employment Studies (IES), we embarked on research with
a major retailer to try to measure the difference between the two concepts of
satisfaction and commitment.
Using data from 65,000 employees and 25,000 customers, we found that
employee commitment had a higher correlation to customer satisfaction than
Importantly, commitment has double the impact of employee satisfaction on
customers’ future spending intentions. A one-point increase in employee
commitment led to a monthly increase of £200,000 in sales per store and reduced
What exactly is commitment? It is evidently something wider than job
satisfaction, although this forms an element of it.
Commitment has several components: compatibility of values, pride in the
organisation, loyalty, job satisfaction and feeling fairly rewarded.
Commitment must also be understood as a two-way street, involving
responsibilities on the employer to develop and value employees.
Admittedly, it may well be difficult for employers to promote employee
commitment at a time when business prospects are uncertain. However, taking no
action at all compounds the problem.
Current research at IES, based on an overview of 14 recent datasets, shows
that employees with high levels of commitment express greater satisfaction with
performance management, the culture of the organisation, promotion
opportunities and communication.
With such a multi-dimensional concept, it is a profound mistake to think
commitment can be pinpointed by ‘the killer question’ approach, the way that
satisfaction has often been.
The traditional technique of judging employee satisfaction by asking ‘Please
indicate how satisfied you feel about working here on a scale of one to 10’
needs to be rejected in favour of more subtle questions that provide a path
through the different components of commitment.
You may ask for ratings against statements like: ‘I find my values and the
organisation’s are very similar’; ‘I speak highly of this organisation to my
friends’; ‘I feel loyal to this organisation’; ‘My organisation inspires the
best performance from me’; ‘I get full credit for my work’; ‘The pay here
compares favourably with other organisations’ and ‘I do not often think about
The point of regular surveys (which should be conducted about once a year)
is to provide the basis of targeted HR strategies in particular areas. These
should relate commitment to business outcomes, such as employee turnover,
absenteeism and financial performance, for example.
Commitment is the result of sustained good people management. This means
communicating organisational values clearly; ensuring support staff for line
managers; training appropriately; managing fairly; paying equitably and so on.
Use statistical techniques to highlight the importance of each of these
factors. Then work out where HR action would have the most impact on business
performance and outcomes.
Satisfaction was a worker-centric measure. What is more important today is
the employment relationship, the basis of trust between employer and employee.
Understanding and improving commitment is the key to maximising bottom line
By Sue Hayday, Research fellow, Institute for Employment